Common Bill Components

Detailed explanations of the charges, fees and adjustments you may find on your bill.

The rates KCP&L charges allow us to provide you with reliable electrical service. They help pay for the investment, operation and maintenance of our electric system. We have collaborated closely with community stakeholders and received approval from the Missouri Public Service Commission (MPSC) to structure our rates using the following components. We believe these provide you detail and transparency – so you can see the costs driving those charges and manage your usage in the most cost-effective way possible.

These rates are commonly applied through two parts – the base rate and riders. Base rates reflect the customer, facilities, demand and energy charges associated with your electricity consumption during a billing period. Riders are additional charges added to the base rate, designed to recover specific costs. These riders apply to costs that tend to be more variable. They provide visibility to the costs that specific rider represents, and allow the amount of the rider charge to vary independently of the base rates.

Charges

Customer Charge – The Customer Charge is a monthly charge intended* to recover the costs of metering, billing, collections and customer service incurred in servicing your account. KCP&L incurs these costs for all of our customers and applies the charge to business and residential accounts, regardless of how much electricity you use. For business customers, this charge is larger for customers with larger demands for electricity.

Energy Charge – The Energy Charge is intended* to recover variable costs inherent in providing you with electricity. Those costs include purchased power, fuel costs (such as coal and natural gas), fuel-related operations and maintenance costs. For some rates it may also include facility and demand costs not represented by distinct charges. KCP&L bills the energy charge on a cents-per-kilowatt-hour (kWh) basis, measuring your electricity usage through the meter at your location.

The price KCP&L charges per kWh varies with the amount of electricity you use and the season in which you use it . KCP&L also applies this charge in “blocks” or price steps. As a result, the total amount you pay for energy can vary. The more power used for appliances and equipment (kilowatts) and the longer you use those appliances and equipment (hours), the more kilowatt-hours you will consume. For most business customers the energy charge is applied via Hours Use blocking, and the rate varies by the size of your demand for electricity.

Demand Charge (business only) – The Demand Charge is intended* to recover fixed electricity generation and transmission** costs related to building and maintaining infrastructure. The demand charge is based on the maximum demand of power (kilowatts or kW) your company uses at any one time, typically measured at a 15- or 30-minute interval. KCP&L bills this charge based on your demand for the month or at a minimum demand charge. This minimum demand charge increases as your company’s size increases. For some customers, these demand charges are incorporated into your energy charges instead of billed separately. 

Facilities Charge (business only) – The Facilities Demand Charge is intended* to recover the operating, maintenance and capital costs of the distribution system closest to the customer. This includes poles, wires, and transformers used to provide your business with service. This charge applies only to customers who are served on rates that include a demand charge. The charge is determined using the highest kilowatt demand measured within the past, rolling twelve months. The facilities charge includes a minimum charge that increases as the customer size increases. 

*Due to other policy considerations, the actual rates approved by the Missouri Public Service Commission do not align perfectly with the cost basis defined here. 
**Those not recovered by the Fuel Adjustment Charge. 

Rate Riders and Adjustments

Fuel Adjustment Charge (FAC) – This covers fuel costs over or under what’s estimated and included in base rates. If actual fuel costs are higher, the FAC increases. If actual fuel costs are lower, the FAC decreases. As a result, customers pay for only the actual costs of fuel used to serve them. This charge is applied on a per kilowatt-hour basis. The Missouri Public Service Commission evaluates and approves these costs each quarter. 

Demand-Side Investment Mechanism (DSIM) – This covers the cost of energy-efficiency programs established as a result of the Missouri Energy Efficiency Investment Act (MEEIA). Energy efficiency helps keep rates affordable over time by reducing the amount of electricity needed to serve our community and delaying the need to build new power plants. This charge applies on a per-kilowatt-hour basis. The Missouri Public Service Commission evaluates and approves these costs periodically.

Renewable Energy Standard Rate Adjustment Mechanism (RESRAM) – For customers in the GMO service area, this is a way to account for costs and benefits experienced to comply with Renewable Energy Standard , over what is already included in base rates. This charge applies on a per-kilowatt-hour basis. The Missouri Public Service Commission evaluates and approves these costs annually.

Other Terms

Annual Base Demand (business only) – The Annual Base Demand (ABD) provides an additional seasonal factor, based on your usage. ABD is part of the Demand and Energy Charges. The ABD threshold is set at 100% of your previous summer demand (kW). KCP&L bills all of your non-summer demand below that threshold at the base rate. Any non-summer demand above this threshold represents seasonal use, and KCP&L provides it at no cost. This rewards customers who tend to use power in the non-summer season. Energy usage (kWh) is apportioned at the ABD base/seasonal percentage, and any non-summer seasonal usage is provided at a reduced per kWh rate. KCP&L annually recalculates the ABD threshold at the end of each September. 

Hours Use (business only) – Hours Use divides the monthly total energy usage (kWh) by the monthly demand (kW). It helps us measure the consistency of your electrical load. Higher-consistency loads are better for the electric grid, allowing more predictable use of our generating plants and other infrastructure, so these loads are charged a lower price per kWh for energy usage.

Summer Months – For the GMO service territory, KCP&L defines these as the full months of June, July, August and September. For the KCP&L Missouri territory, they begin May 16 and end September 15. Because overall demand for electricity is higher in these months, different rates may apply. 

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